Lean future looms for besieged broadcaster

By SIMON HENDERY media writer

"TVNZ enters the new millennium in an excellent financial and on-air position," company chairman Ross Armstrong wrote in the SOE's annual report, published just eight months ago.

Revenues and ratings were up, transmission and networking businesses on both sides of the Tasman were performing exceptionally well, and TVNZ owned one of the country's most popular websites.

"These are all strengths the company needs in abundance as it faces the next two great challenges the redefinition of its role as a publicly owned New Zealand broadcaster and preparing for its digital future."

Dr Armstrong's suggestion that TVNZ needed a full war chest going into 2001 has proved correct.

The company has been stung by an advertising slump which it says will hit its bottom line this year, as will its decision to pull infomercial programming from One.

It also faces the likely loss of its transmission cash cow BCL, and possibly its other revenue-generating subsidiaries - satellite link company Satellite Services and Moving Pictures, which provides outside broadcasting facilities - which may join BCL in a separate SOE. Losing its subsidiaries will mean that a new-look, charter-focused TVNZ could probably, at best, expect to break even in future financial years.

Under its Government-driven charter, it will be compelled to produce "quality" - ie, expensive - prime-time programmes likely to scare off more advertisers.

A spokesman for Broadcasting Minister Marian Hobbs said the cabinet was to consider papers on a carve-up of TVNZ and its future funding on May 28.

The Government also has to decide whether profit or the charter should take precedence in TVNZ's business planning. Ms Hobbs said yesterday that changes would be on an organisational level, rather than directly affecting staff.

If TVNZ was to lose BCL, it would not be left in the lurch. BCL profits would still be available on Government books for possible recycling to support the company's charter commitments, she said.

A new funding structure is unlikely to take effect before July next year.